Friday, December 4, 2009
Preparing your finances before having a baby
Posted by: Christina Dove
Having a baby can be a very exciting time for a family. However it can also be a time to accumulate many expenses that you did not anticipate. The transition of having a baby can be much easier if you are able to "baby-proof" your finances. Since it will be very important to have a steady income to support the new children, families have to reduce the risk in their investing portfolio. That means dialing down risk in their company-stock-laden portfolio and in general "balancing our investments to meet short- and long-term goals," says Stephanie. The couple also need a savings plan. This is one of the most crucial steps in planning for having a baby.
Another crucial step in preparing to have a baby is to make sure that you have a cash emergency fund that will be available for use if the expenses become more than expected for a short time period. Having some extra cash set aside will reduce the stress when your finances get tight and you aren't sure how you are going to support your current lifestyle, especially with a young child. Most importantly it is best to start a family once both parent's jobs are stable and there is a stable substantial income for the family to live off of. If a family decides to have a baby too soon it can hinder their financial goals for the future and they are always going to feel like they are strapped for cash.